Rytis Makvicius v The Commissioners for HMRC
[2024] UKUT 321 (TCC)
The Commissioners for HMRC v Abubaker Arrbab
19 January 2024
[2024] EWCA Civ 16
Court of Appeal
HMRC made a mistake in Mr. Arrbab's tax credits. He tried to appeal late, but a rule said he couldn't because he didn't ask for a review first. The court said that rule was illegal because it unfairly stopped him from appealing to an independent tribunal. It was like HMRC became the judge of its own mistakes, which is not fair. Even though the money issue was solved, the court ruled that the rule is wrong.
Key Facts
- •Mr. Abubaker Arrbab's tax credit award was reduced due to an HMRC error in recording his employment status.
- •Mr. Arrbab's request for mandatory reconsideration was rejected as late.
- •The Upper Tribunal (UT) held that Mr. Arrbab had a right of appeal despite the late application.
- •HMRC appealed to the Court of Appeal, arguing the UT erred in law.
- •Mr. Arrbab counter-argued that the relevant statutory instrument was ultra vires and incompatible with Article 6 ECHR.
- •HMRC subsequently conceded their initial decision was unsatisfactory and repaid the wrongly recouped amount, rendering the appeal largely academic.
Legal Principles
Subordinate legislation is ultra vires if it exceeds the scope of the statutory power conferring it. A restrictive approach should be adopted where there is genuine doubt.
R (on the application of Public Law Project) v Secretary of State for Justice [2016] UKSC 39
There is a strong presumption against excluding rights of appeal unless explicitly provided for in legislation.
R v Emmett [1998] AC 773
A fundamental right of access to a tribunal or court can only be infringed by express statutory authorisation or necessary implication, and such infringement must be reasonable.
R v Secretary of State for Home Department, Ex parte Saleem [2001] 1 WLR 443
The constitutional right of access to courts is inherent in the rule of law and can only be curtailed by clear statutory enactment.
R(UNISON) v Lord Chancellor [2017] UKSC 51
Explanatory Notes can aid purposive interpretation by illuminating context and mischief addressed.
McDonald v Newton [2017] UKSC 52
A court has no power to modify an invalid provision; severance is only possible if textually and substantially possible without changing the legislative purpose.
DPP v Hutchinson [1990] 2 AC 783
Outcomes
The Court of Appeal allowed HMRC's appeal on the construction issue, holding that the UT's interpretation of the Tax Credits Act 2002 was incorrect.
Section 38(1A) of the 2002 Act requires a review to be carried out before an appeal; a late application and refusal to extend time precludes this.
The Court of Appeal dismissed HMRC's appeal on the ultra vires issue, declaring section 38(1A) of the 2002 Act ultra vires.
The 2014 Order, which introduced the mandatory review, exceeded the power conferred by section 124 of the Finance Act 2008. It improperly removed the FTT's jurisdiction to consider late appeals, infringing the right of access to justice.
The Court of Appeal remade the decision, allowing the appeal against the FTT's decision to strike out Mr. Arrbab's appeal.
The appeal was deemed academic due to HMRC's subsequent actions, but the court addressed the point of law for its broader implications.